City and county leaders found themselves on opposite sides of the issue Tuesday night when Hopkins County officials spoke to the Sulphur Springs City Council members about a senate bill that would allow the county to use sales tax to pay off the $16 millon jail bond.
For all the explaining county officials did, the council passed a resolution opposing the bill.
County Judge Robert Newsom was first to address the council about the county's plan to use sales tax revenue to retire the jail construction bonds.
“There is a difference of opinion here, apparently,” Newsom said. “There were 22 meetings back in 2013 about whether we should even get a jail or not. That was a big deal because building the jail is very expensive, about a $16 million project. People kept coming up wanting to know if there was any other way that you can do this other than property tax, putting it on the backs of property owners.
“The thought stayed with us and we decided to pursue it a little bit and see what it would look like because the law wouldn't allow it,” he said. “The city gets one cent sales tax consistently and we get a half-cent so, sales tax is not a new thing to us at all. However, we are at the cap of the state, they won't let us do it unless the legislature take steps so we might be able to have between one-eighth and a half-cent to pay for this jail rather than the property tax owners doing it alone. It would spread it out so that everybody would pay a little bit of sales tax and it would be enough — we would have to be careful, of course, to make sure it would just cover the bond, which is a little less than $1.2 million every year.”
Newsom said if the proposed legislation, Senate Bill 1158 is passed, the option would still be with the voters in the county, that a petition would have to be circulated to call an election on the issue.
“The amazing thing about it is that the people would actually vote,” Newsom said. “'Do I want to pay for this, the bond has to be paid through property taxes or do I want to pay through the sales tax?' Voters would actually make a decision, have a vote on it next November. My premise is, I would like to see the people have the opportunity to make the decision of how do I pay for this jail because it is a big debt. It's something we had to have — we didn't have a choice.”
Precinct 1 County Commissioner Beth Wisenbaker said county taxpayers have had hard times in the two years since the new jail proposal was presented to voters.
“There are some people that are having trouble meeting their property tax, and time and time again we were told, 'Isn't there any other way other than the backs of the property owners to pay for this jail that the state required us to build?” she said. “We have to go to the state legislature for permission for anything we want to do that isn't in statutes.
“So, what we did is, was over this two-year period, we began to make plans as to how we could do this,” Wisenbaker continued. “It's evolved from one paragraph to the bill that you are looking at now.”
Wisenbaker said that, under SB 1158, it is the law that when the bonds are paid off, the tax would go away.
“No more of this of if you are taxed, it just kind of stays there forever. It's written in law,” she said. “It will go away and, if it were ever to come back, it will have to start the process all over again so people will have the comment. The people deserve the right to their vote and that's what this bill is for.”
Wade Bartley, Precinct 3 commissioner, said it is a tough responsibility to make these decisions, that it would be easier for the commissioners court if voters answered the question.
“So, let's just work it that way, find a way to make it work,” he said. “I hope you will take that into consideration what we're trying to do and let the voters decide how we want to handle this issue.”
City Manager Marc Maxwell said the issue was something he felt “very passionate about.”
Maxwell offered statistics gathered from around the area, specifically Texarkana, Ark., and Texarkana, Texas, comparing sales tax rates and the effect on property taxes, retail business and the overall economy in those cities.
Maxwell also presented statistics showing that, in cases where sales tax has been used to fund a project and lower property taxes, the property taxes have risen to even higher levels within two to three years.
Councilman Clay Walker also spoke in opposition to the county's plan, saying an increase in sales tax would drive business away from both the city and the county.
The resolution, as approved by the council, will be forwarded to State Sen. Bob Hall and State Rep. Dan Flynn as well as other members of both houses of the State Legislature emphasizing the city's position on SB 1158.
“Opposing the passage of Senate Bill No. 1158 and the creation of a disadvantageous local sales and use tax rate approximately 7 percent higher than the sales and use tax rate imposed throughout the remainder of the state of Texas, supporting the enhancement of retail sales throughout the city of Sulphur Springs and encouraging continued economic growth and vitality throughout Hopkins County,” the resolution states.
The city's resolution also cited property tax rates in a number of neighboring counties that show the rate in Hopkins is higher than in any of those counties.
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